Merkel "Greece has honored its pledges," ..[ 3974 ]

Merkel, in Athens, Praises Greek Reform Progress

ATHENS, Greece April 11, 2014 (AP)

By DEREK GATOPOULOS and NICHOLAS PAPHITIS Associated Press

Greece won praise Friday from German Chancellor Angela Merkel — the lead advocate of eurozone austerity — for its painful economic turnaround and successful return to markets.

But Merkel added a polite reminder that the bailed-out country still wasn't out of the woods.

"Greece has honored its pledges," Merkel said at a news conference with Greek Prime Minister Antonis Samaras in Athens. "I hope that policy is continued."

Merkel's brief visit, her second since Europe's debt crisis erupted in Greece more than four years ago, came amid Greek government euphoria over the country's successful re-entry to international bond markets on Thursday. The landmark five-year issue was Greece's first since 2010, when it was saved from bankruptcy by a massive bailout from its European partners and the International Monetary Fund.

"Greece has made it," Samaras said, before striking a more sober tone.

"My pace and that of my government will not change. What has changed is the image, the psychology ... markets have voted for Greece and given it their confidence."

Merkel remains a divisive figure in Greece because of her insistence on economic pain. During a visit in 2012, she was greeted by mass anti-austerity protests that turned violent, and about 5,000 police officers were deployed Friday to guard areas on Merkel's itinerary and enforce a ban across most of central Athens on planned protests.

Security was tightened further after a powerful car bomb exploded early Thursday outside the Bank of Greece, causing damage but no injuries. No group claimed responsibility, but police suspect domestic anarchist militants.

About 1,000 people held peaceful demonstrations outside the prohibited area, but dispersed under heavy rain.

The austerity measures that have helped stabilize public finances have exacted a horrifying social toll. The economy has shrunk by about a quarter during the crisis and unemployment is near 27 percent.

"I believe that after all these necessary reforms have been carried out — with more remaining — that Greece will have more opportunities than difficulties," Merkel said at the start of her visit.

Her talks with Samaras, who is facing opposition party demands for early elections along with next month's vote for the European Parliament, included a German initiative to support small Greek businesses, as well as future negotiations on Greek national debt relief.

The two leaders also met a group of Greek entrepreneurs who have created Internet startups.

"I don't know if your friends will talk to you after you tell them that you met the German chancellor," Merkel joked.

Meanwhile, Fitch ratings agency warned the successful bond issue didn't mean an end to Greece's financial problems. In a report Friday it said the issue showed the country's progress but doesn't mean it will be able to finance itself on its own when the bailout program ends later this year. It also highlighted risks that political support for reforms might wane.

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Geir Moulson and Kirsten Grieshaber in Berlin contributed to this report.